Oil prices have plummeted more than 25% in the past three months on concerns that economic growth is slowing while oil supplies are increasing. Year-to-date, the average price for WTI crude has been $66 per barrel, just below our forecast of $67, though the current price is in the mid-$50s. That compares with $51 in 2017, $43 in 2016, $49 in 2015, $93 in 2014 and $98 in 2013. We think that oil prices hit an inflection point in 2018, and look for a lower average price of $62 in 2019, with a range of $50-$75. Our forecasts are based on several inputs, including conversations with company managements, and the activity of traders, who generate futures prices and the forward curve. The forecast range is also influenced by slowing global demand growth and increased domestic supply, as the U.S. moves toward energy independence, as well as by OPEC announcements. Finally, trends in the U.S. dollar exert pressure on commodity prices, including crude oil. Given the volatility in oil prices, our investment recommendation on the Energy sector is now Market-Weight.
Forex and stock traders are looking for the consistently wrong investor, trader and take the opposite position. This will obviously lead to winning trades for them. All traders have read trading books that point out that increasing volume is good for the continuation of the trend. Many new stock traders will try and fight the trend.
No comments:
Post a Comment